Interoperable pools, grounded terminals and digital technologies can speed cargo cycles and promote more efficient utilization of chassis, trucks and terminals.
The supply chain is called that for a reason. It’s made up of many links, all of which are dependent upon the others if the whole is to operate efficiently.
So, when reports surface of chassis shortages in seaports and at intermodal ramps, you can be sure that it’s not just about chassis. That being said, it’s entirely likely that chassis management in North America could stand some improvement. The supply chain could also benefit from some expansion of the chassis fleet, but that’s being impeded by Trump-era trade policies that have been extended by the Biden administration.
In the congestion-snarled Port of Los Angeles, turn time for chassis reached 8.5 days, 70% above the historic norm, according to Gene Seroka, the port’s executive director, at a recent journalists’ briefing. Container dwell time at terminals reached 5.3 days, and 8.3 days on the street. Seroka estimated that each additional day of dwell-time requires 3,500 more chassis.
East Coast ports are also not immune to chassis shortages. In August, Maersk reported that at Newark terminals “chassis continued to be a limiting factor,” and that a surge in import cargo “will most likely exacerbate the chassis issue.”
Platforms and Pools
About half the chassis used at the ports of Los Angeles and Long Beach belong to a pool of pools, with others being handled by private pools or managed by truckers. That state of affairs represents a suboptimal way of managing the equipment, according to Mike Wilson, CEO of Consolidated Chassis Management (CCM).
“The pool of pools operating in Southern California shares assets but that’s all,” said Wilson. “They don’t operate on a common platform and don’t have common procedures for metrics. It’s a partial solution to the problem.”
CCM operates totally interoperable chassis pools, providing a better solution, according to Wilson. “It helps make trucks and terminals become more efficient by increasing cargo velocity,” he said, “and allowing them to handle more cargo per cycle.”
In CCM’s “grey” or utility-style chassis pools, equipment providers contribute chassis to the pool, and then can pick up and drop off the equipment wherever they need to within the network. “Any box can be picked up by any motor carrier from any facility and dropped off at any operating facility in the network,” said Wilson. “They’re not wasting time hunting for the right chassis or moving them around. In non-interoperable pools, chassis can be used only for specific container lines and must be dropped off and picked up at specific locations.”
Interoperability also means that motor carriers can use the same chassis for multiple container moves without having to unhook, saving time and money, promoting safety and efficiency, and adding truck capacity to a tight supply picture. At intermodal ramps, operators can choose any chassis on the facility to discharge a container, which promotes faster loading and discharging of trains, quicker railcar movements in and out of the ramp, and the ability to cut the number of chassis required at any given facility.
CCM operates the South Atlantic Chassis Pool (SACP), the nation’s largest fully interoperable chassis pool, covering Alabama, Florida, Georgia, North Carolina, and South Carolina. SACP handles international containers to and from the ports Jacksonville, Savannah, and Wilmington, N.C., as well as the inland intermodal hubs in Atlanta, Birmingham, and Charlotte. The company also operates interoperable pools in St. Louis, Kansas City, Memphis, Nashville, Huntsville, Denver, and Salt Lake City.
“In the southeast, we are operating as good as if not better than most regions,” said Wilson. “Our model is facilitating cargo flow pretty well.”
But the pool is also experiencing the same supply-chain problems seen elsewhere. “We typically open up with not enough chassis to run the day’s business because they are out under boxes parked at distribution centers,” said Wilson. “The system is stressed, but I think we are faring better than most.”
One way to free up chassis and create more system fluidity, according to Wilson, is to create more grounded terminals. “With the container on the ground, you let the chassis get back into circulation to pick up another load,” he said. Grounded terminals are proliferating mostly in interior locations such as Chicago, Memphis, and Dallas.
Grounded terminals represents “a solution that is being adopted more and more around the country,” said Wilson, “but it’s not significant and will not by itself solve the problem to keep chassis moving.” Interoperable chassis pools such as CCM’s are also being adopted in a limited fashion, representing less than 25% of chassis in North America so far.
The chassis fleet in North America could stand to be expanded in order to mitigate shortages, but a ruling in May from the U.S. Department of Commerce, leaving in place anti-dumping levies imposed at the end of 2020 on chassis imported from China, stands in the way. Those Trump-era tariffs have had the effect of pushing down chassis production and pushing up prices by some 300%. Trump-era steel tariffs have also burdened domestic chassis manufacturers.
“We probably lost 25% of our domestic chassis production because producers weren’t able to pick up the pace because of increased costs,” said Wilson.
In the future, chassis management will benefit from the increased deployment of technology. “Technology will continue to be a catalyst in the supply chain,” said Wilson. “We will see chassis evolving to become technology platforms. The data that will be provided by technology innovations will help the network operate more efficiently.”
GPS technology is increasingly being deployed to the chassis fleet to provide location information to better manage the assets, improve the efficiency of the network, and reduce the carbon footprint of trucks. Telematics sensors will also gain widespread utilization, said Wilson, in order to monitor tire pressures and general structural integrity.
“If the unit is failing, that information can be tied into driver notifications,” said Wilson. “That can improve both productivity and safety.” Wilson foresees these technologies becoming widely available in the next year or two and being widely implemented in the North American chassis fleet within the next three years.